Welcome to Intervacc Q4 2023 report presentation. For the first part of the conference call, the participants will be in listen-only mode. During the questions-and-answer session, participants are able to ask questions by dialing pound five on their telephone keypad. Now I will hand the conference over to CEO Jonas Sohlman and CFO Jan Persson. Please go ahead.
Thank you very much for that introduction. I will just say welcome to everyone to our conference call presentation, the year-end report. With me today, as already has been announced, I have Jan Persson, the company's CFO. We will then start, as you've been informed, with a presentation of the report, and subsequent to this we will open for a Q&A session. Okay. So the sales for the quarter is SEK 1.6 million, which is then less than last year. For the full year, we had a sales numbers of a little bit over SEK 8 million, which is also less than the full year for 2022. Due to our business model, where we are using Dechra Pharmaceuticals as our European distributor of Strangvac, we will experience volatility in our sales of Strangvac in the near future, in the coming periods.
The quarterly result is slightly better than last year's fourth quarter, and for the full year, our loss is greater and relatively much greater than it was last year, 2022. The reason for this and the vast majority of this change is then related to the impact from the non-recurring write-down and provisions that we did during the third quarter. On the cash flow side for the quarter, related cash flow for operating activities, I should say, was better than the fourth quarter 2022. For the full year, the same item, being the cash flow from the operating activities, was a lot better than 2022. The reason behind this improvement is rather related to 2022, where there was a larger amount of production that was performed, sort of putting a drag on the cash flow.
On the equity side, I would say that the company's assets is financed in its totality with equity and operational debt. So we are not financed in any way by any financial debt, and the equity ratio is in excess of 90%, which is a very strong balance sheet. The cash coming to the cash position, the cash end of the period is close to SEK 90 million, and that is quite equivalent to the total net amount, the net cash from last year's rights issue. And I think that is really a strong message that we have not still not started, basically, up until the year-end, we have consumed a very limited portion of the cash that came from the rights issue in the mid of last year. Okay.
With that said, on the numbers, I will then have a bit more relation to what has happened during this quarter. Well, first of all, as you have in the CEO comments in the beginning, we had the EGM where there was a change of the entire board. And I must say that I feel very good in that sense because not sort of from the change of the board, but rather to the response within the company and all employees and partners. Because I feel that there has been a very positive team spirit from all employees and close partners, despite this turmoil and change from a corporate governance perspective. So that is really impressing and gives us a strong view for the future, I feel.
Then, if I move on to the sales efforts, what we have done, moving on to Strangvac, during the quarter we have then had a lot of focus on the sales efforts in Sweden. We have increased the collaboration with Dunstan. We have additional options to enhance the availability of Strangvac. And then we have sort of put a lot of effort into knowledge, education, performing webinars, contributing to this increased knowledge, both about Strangles as such, but also about our product and vaccines, Strangvac, and that is then to veterinarians and horse owners. However, the sales volumes are remaining modest, and variations between the months persist, but they are now at a slightly higher volume and a more stable level than before. We have also noted an increased interest in Strangvac from both veterinarians and horse owners in the market. That, I think, is really encouraging.
During December, as of last year, we also performed a meeting together with our distribution partner, Dechra, where we convened a KOL meeting, being the abbreviation for Key Opinion Leaders, in Flyinge, at the premises of Kungsgården Flyinge, which is then a national facility for equestrian education. This meeting provided us with a unique opportunity to have an exchange, knowledge, and field experience in the preventive efforts against Strangles. What was really noted during this extended day was really that there has been a positive shift in the expert community's perception on the safety of Strangvac, safety and effectiveness of Strangvac, and this is really based on use in the field. It's really a practical experience where they are sharing together an improved position and stand with Strangvac and the work against Strangles.
We will then, of course, continue to prioritize education on both Strangles and our vaccine, and really to have an increased confidence in both veterinarians and horse owners regarding the use of Strangvac. When it comes to the U.S. or sort of expanding our territories, there is a problem or an issue, I would rather say, with the USDA, being the United States Department of Agriculture, where they have accumulated a significant backlog of pending matters. This really includes approvals for manufacturing conducted outside the U.S. due to the fact that these productions include physical site visits. In light of this and really seeing that we have now initiated the approval process, which will then include that parts of our manufacturing will take place in the U.S., and that is likely to expedite the approval timeline.
So that is really a lot of work that has to be put into this. Also to consider is really that the manufacturing of biopharmaceuticals is a very complex process and production, and we have then committed to and we have continued to allocate resources towards the development and improvement of analytical methods and manufacturing processes. The reason for this is because we have relatively limited experience in producing Strangvac, so we need to improve those methods and processes in order to strengthen all of this forward, whereby we are reducing risk of disruptions in manufacturing process and positively impact the ability to generate future revenue and profitability. Of course, we do keep the goal and expectation regarding Strangvac. We have that unchanged, and we are working to establish Strangvac as a standard vaccination for horses.
Moving over to the project portfolio, we have earlier discussed about our vaccine development for mastitis in dairy cows. Here we performed a test during last year, where we didn't achieve a statistical significance in the terms of protective efficiency. Here we have presented this in the past report in the Q3. We were sort of delving a bit more into this, that the challenge doses were most likely too high, and I won't delve into those details, but rather for you that are more interested can find more information in the previous quarter's report. Here we have, for the year of 2024, we have no plans to conduct any further studies in this project, but that is probably what we will have to look into and discuss in the future, how we aim to perform and continue that work.
Also during the fourth quarter, we received a further granted patent for an application for the pigs' vaccine, the Streptococcus suis infection to pigs. We have also during this period received funding from a Eurostars 3 program to further develop our prototype vaccine against the Streptococcus suis infection to pigs. This development is a collaboration with Moredun S cientific that we also have worked with in the past. This development project, it is something that spans over three years with an approximate budget of EUR 1.7 million. The grants that we have received from Eurostars 3 will cover approximately 50% of the total budgeted costs. We will also here work in collaboration with Testa Center, we will work together with SLU, we will work with Karolinska Institutet as well.
Really, I think that this is important because this gives evidence to the potential that we see in this vaccine, and also by improving animal health, reducing needs for antibiotics, and contributing to enhanced profitability for farmers, we really have a possibility and a potential to make a positive impact. Coming down to the sort of final sections of this, with the capital that was raised through the rights issue that was done last year in June, that provides us cash to really satisfactorily run the operations throughout 2024. We also would like to use these funds, of course, to accelerate the sales development of Strangvac and drive the company's long-term growth. But we will also here start and initiate work to strengthen the financial position.
That is also important that we are doing this well in advance because I see that that provides us more opportunities going forward. Finally, I'm sort of coming back to that there has earlier been reported a future potential for Strangvac, and the problem with that future potential is basically that it's not specifying when in time this would happen. So even if this is feasible, which I think it really is, it is feasible, it is really difficult how to translate this into a relevant financial goal. Therefore, we will not currently set any financial targets, either short or long term. The focus that we will have is to drive efficiency on sales and production for Strangvac vaccine. With that said, I would like now to hand over to the Q&A session.
If you wish to ask a question, please dial pound key five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial pound key six on your telephone keypad. The next question comes from Klas Palin from Carnegie. Please go ahead.
Yes, hi there. This is Klas Palin from Carnegie, stepping in for Magnus Behm. Thank you for taking my questions. I understand fully that you are not providing any financial guidance, but maybe you could just give some sort of an indication what will be in focus in 2024 to broaden the awareness of Strangvac, especially in Europe then, from you and your partner. Perhaps what kind of markets which markets we should expect any material sales in 2024?
Thank you. Sure. I will at least try to. It was a bit hard hearing your question, but I think I got the question that you posed. It is really to give some sort of better guidance. I will repeat it. It's really to give a bit of better guidance what we will do in efforts in terms of increasing sales and also what would be the main markets. Well, of course, we will focus on this and driving the sales. And I think that the issue here is that when we are working with this marketing here of Strangvac, it is really that we have to make a clear distinction whether we are marketing and discussing this towards veterinarians or persons able to prescribe our products compared to the end consumers actually using this product into their horses.
Here I think it's important that we are really working we are working hard on that side where we are working through these key opinion leaders because they will be able to provide guidance in that sense. So I think that in that meeting that we had, as I explained in Flyinge, I think there was a huge shift. Given my personal presence at that meeting was for the first time, it was hard for me to really say what is the direction and what is the change. But from all the people I have talked to that have participated in these previous meetings, they feel that there was a huge shift from the knowledge in the field. And it's really the most important part is really the safety for the new vaccines and the use in the field.
So the use in the field will provide us with a lot of strengthening in the usage of Strangvac because the horse community and horse owners are sometimes relatively conservative what to use in their horses. So they would like to see that it's really working well, and I think that especially from a safety perspective, of course. And here I think that will improve this a lot. And that is my clear view, and that is how we intend to work. And for the concrete in question, I would say that first of all, we, of course, do our own sales in the Nordic region of Sweden and Denmark. And there we will put in effort from the company side, but we will also work in close collaboration with Dechra and make joint efforts, being at different exhibitions, performing lectures, etc., etc.
I think it will be a broad scope on several major markets.
Okay. Thank you. And you also mentioned that you're sort of changing the strategy to reaching commercial approval by the USDA in the U.S., and that part of that is to have some part of your manufacturing process at a U.S. manufacturer. Where do you stand in this process? Have you been starting this process?
Yeah. As we said, we have initiated the process, yes. That we have done. However, as I mentioned, there is a sort of queue with USDA where they are affected by the COVID. And the reason for that is, of course, that if you intend to introduce and have an approval of our vaccine in the U.S., they're going to have USDA will have to make physical inspections of the production site. So that is a process that is then clear to us. But there are different ways. So for instance, there are things where we can have a part of the production process within the U.S. There might be a quicker route for us to come into and have an approval in the U.S. So we are looking into this, but we have initiated the process, and we are scouting for potential partners for this.
Great. Thank you. That's all from me.
Thank you.
The next question comes from Mathias Paulsen. Please go ahead.
Hi, and thank you for a good presentation. I think I'm on the same topic as the previous speaker. So I'm curious about the sales towards the end consumer. We talked a lot about how to influence the professionals or the researchers and so on. But the last six months, I have talked to horse owners, primarily in Sweden, and they are not aware that a vaccine exists. So it seems like there's some kind of gap between the professionals and me as a consumer in the end. So my question is primarily, so let's focus it. Have you elaborated, done some research, and looking at how you could do digital marketing towards me as an end consumer? And have we looked at the ones that are really good at this in the horse domain, like Maya Delorez or the Equestrian Stockholm, who is marketing clothes for the horse market?
But they are not marketing their brand. They are just influencing the community.
Okay. First of all, if we talk about marketing of our product, here I think there's a problem, and that is related to the fact that we're solely allowed to market our product towards veterinarians or someone that can prescribe our products. That is a problem. However, we can do things where we lecture around Strangles as such and the effects from Strangles and making people and the horse community more aware that the effects out of Strangles, first and foremost, from a sort of horse welfare issue, but also secondary to that is really the economic incentives, and especially for horse owners or horse owners in such a sense that they are running a full operation dependent on having horses in larger stables like riding schools, trotting business, and so forth. We will combine those efforts.
One thing that we can do here is really that we have initiated is that we are working together with Dechra, for instance, whereby Dechra has a possibility to talk close to their customers and address this question with their customers in order to limit the risks of spread of strangles and the welfare for horses. So yes, we have considered that. We are also working on webinars where we are putting on webinars, but primarily our focus has been to work on the side for the veterinarians because, as I mentioned here, we have the key opinion leaders being the sort of influencing or influencers community of the veterinarians community. They have now, as I mentioned in this meeting we had in Flyinge, they felt that they were really positive on the efficacy and safety of our vaccine from usage in the field.
That is a shift. So I think what you are stating here is somewhat where we are in a transition where I think we are starting to have the majority of these KOL people over on our side, and we are then moving into the second stage where we are coming into the more sort of operational veterinarians sort of doing the day-to-day work. I'm not stating that these people, KOL people, are far from treating horses, just sitting on the desks or doing some research. No, that is not the case. But still, it might be slightly different here. So I think we have to take it sort of step by step. We are addressing this in that sense that you are mentioning here.
Okay. Klas's question, just one more. Does that limit you from increasing the brand awareness that you can't market the vaccine, say, in a digital market? I mean, more than 50% of the companies are active on Instagram and Facebook and so on. You don't even have one post on Instagram, and you have one on Facebook. So have you looked at those channels and decided this is nothing for us, or have you looked at it, or are you looking at it?
I would probably say the latter, that we are looking at it and see what we can do. I must admit to your question here that I haven't really had the time since I joined as interim now as of last year in August. I haven't had time to delve into all the details surrounding what we actually can do in detail. I know that we are looking and seeing what can we do rather than to state and say what we can't do.
Okay. Thank you for a frank answer. And I'm looking forward to seeing what's coming up next. Thank you.
Okay. Thank you.
As a reminder, if you wish to ask a question, please dial pound key five on your telephone keypad. The next question comes from [Anders Dierff] from private. Please go ahead.
Hi. My name is Anders. And as a competitor, we are regulated in Sweden to have the vaccine for horse flu. But how are you working against the organization to get Kvarka into regulated competing?
Yeah. Okay. I will rephrase your question to see that I understood you correctly then. You are talking about the currently in Sweden, as I said since that was your question, we have a mandatory rule that you need to have horses vaccinated at least yearly against horse flu. And your question here is really how do we get a mandatory rule for vaccination against kvarka or against, sorry, against strangles. Sorry, mixing a bit Swedish and English. Against strangles. Is that correctly understood?
Yeah. Yes, it's correct.
Okay. Perfect. Perfect. Then I can tell you that we are, of course, working on that, and we have addressed and we have had meetings. And I would say primarily what we have done is, of course, since we're a Swedish-based company and we are working in Sweden to a large extent, we have approached and we have had discussions around topics related to this with, for instance, the Swedish Equestrian Federation. We have addressed it on several occasions. And what I really think here in order to come to this stage, that is really, as I mentioned here, where we said that the goal for the company in Strangvac is really to establish Strangvac as a standard vaccination for horses. And within that phrase, I would say that it's also that we should or we are aiming for it to be a mandatory vaccination for horses.
But unfortunately, this will probably take some time because already we have had a period of time where we are working for the ramp-up for the sales and the ramp-up for the understanding, knowledge, and certainty, and not to say the least, the safety of the vaccine. And here I think we need to overcome that and really that you could see that we have mentioned that earlier that we have vaccinated a larger population of horses on the same farms. So for instance, we have vaccinated horses at Flyinge. We have vaccinated horses at Strömsholm. We have a few others within the trotting area. So we have Menhammar, for instance, for you who know that, where there's quite a few horses in the same place.
I think that is giving us more certainty, and we can see what happens, and we can follow these horses over time on a larger population. By doing that and make sure that we have this progress for the understanding and acceptance of our vaccine, I think then we are moving into this mandatory stage, which you are referring to here.
Okay. How long time perspective do you think it can take?
Oh, I would say how long is a string? No, sorry to say, but it's really hard to tell. It depends, of course, how fast will we have the market penetration? Are there any obstacles coming up? What will happen in relation to this? But I would say that if you follow the horse industry, you could see that one thing that is addressed primarily on this is horses' welfare. And by sort of adopting sort of studies, conferences, discussions on horses' welfare, I think and hope that this will likely be on the quicker side, but I wouldn't dare to promise you anything because that is really hard.
Okay. Thank you.
There are no more questions at this time, so I hand the conference back to the speakers for any closing comments.
Okay. Really, I don't have any sort of closes anymore than say thank you very much for attending this presentation, and thank you for interesting questions. With that said, unless someone has any further questions, I think that we perhaps should conclude. Do you have any additional remarks, Jan?
No.
Okay. So thank you very much for attending this presentation.
There are no questions at this time, so I hand the conference back to the speakers for any closing comments.